Environmental, Social & Governance Report

Material Issues


Integrity is doing the right thing, even when no one is watching

C. S. Lewis

A Strong Corporate Culture

We consider that effective Corporate Governance is at the heart of the successful running of our company, not only because it improves the Company’s overall performance, but also because it promotes trust among our stakeholders. Since the Company’s establishment, we have a long-standing commitment to govern and conduct our business with integrity, honesty, fair dealing and full compliance with all laws and regulations in place. Among our first priorities is to set up a corporate working culture that promotes high ethical behaviors and encourages the individual responsibility. Danaos Shipping, being the exclusive manager of Danaos Corporation (DAC), abides by the DAC’s Corporate Governance Guidelines and the Code of Business Conduct & Ethics and Policies.

The fundamentals for a strong corporate environment are set by the DAC’s Board of Directors through the Top Management. Based on the Company’s dynamic organization chart and detailed job descriptions, specific roles are established for each employee. The employees, being devoted to the implementation of the Code of Business Conduct & Ethics and Policies, conduct the Company’s business on a day-to-day basis, under the direction of our Chief Operating Officer.

Danaos Shipping abides by the:

High Ethical Principles

We have developed our Code of Business Conduct & Ethics and Policies, encompassing the ten principles of the United Nations Global Compact about Labor, Environment, Anti-Corruption and Human Rights. The purpose of these Code of Business Conduct & Ethics and Policies is to uphold the reputation and integrity of the Company that are valuable assets and vital to our success. Each employee of the Company is responsible for conducting the Company’s business in a manner that demonstrates a commitment to the highest standards of integrity. Though, no Code can replace the thoughtful behavior of an ethical employee.

It’s beyond question that our employees are expected to avoid conflicts of interest in their personal and business activities, in any number of circumstances. A conflict of interest occurs when an employee’s or an employee’s immediate family’s personal interest interferes with, has the potential to interfere with, or appears to interfere with the interests or business of the Company. Should an actual or perceived conflict of interest arise, an employee must promptly identify and disclose.

Since a conflict of interest can occur in a variety of situations, employees must keep the foregoing general principle in mind in evaluating both their conduct and that of others. Only the Board of DAC, upon receiving an adequate justification, may approve any waiver of any ethics policy for any director, executive officer, or an employee.

The shipping industry is inherently vulnerable to corruption due to its international nature and interactions with authorities at various levels in ports around the world. Undoubtedly, we must conform with our Anti-Bribery & Anti-Corruption (ABAC) Policy by asking our officers, employees, agents, brokers, vendors, partners, managers, consultants, contractors, joint venture partners, and all other representatives to act with integrity in all their business dealings – i.e., to do the right thing for the right reason. The purpose of ABAC Policy is to memorialize the Company’s commitment to adhere in the conduct of our business activities worldwide to both the letter and spirit of any anti-bribery legislation, and anti-corruption, anti-fraud, and anti-money laundering laws of countries and regions where the Company operates. As corruption can take place everywhere, it is significant to mention that only 1.2% of our port calls in 2020 were in countries in the 20 lowest rankings of Transparency International’s Corruption Perception Index (CPI).

Compliance with environmental, safety, and socio-economic laws and regulations is of constant concern. Employees receive periodic training on the contents and importance of the Code of Business Conduct & Ethics and Policies, and on how violations must be reported and waivers must be requested. All employees of the Company certify on an annual basis that they are in full compliance with the Code of Business Conduct & Ethics and any related policy statements. Having established standard operating procedures, we have created accountability and a culture of compliance throughout our organization which is necessary for the long-term development of the Company. We have also developed and implemented procedures for identifying, interpreting, and effectively communicating compliance issues to both our shore-based and onboard personnel. We provide a safe and anonymous system for anyone who wishes to report to the Company in good faith any violation. All our employees, vendors, agents, technicians, contractors and are encouraged to report any violations of the Code of Business Conduct & Ethics and Policies and any other compliance issues directly and anonymously to us via our whistle-blowing link. Additionally, our employees may report any concerns regarding any violation without fear of dismissal or retaliation. However, we retain the right to dismiss any employee or crew member on board any of the vessels under our management for violation of our Code of Business Conduct & Ethics and Policies or any other applicable international rule and law.

The purpose of the Code of Business Conduct & Ethics and Policies is to:


Bribery, fraud, and corruption incidents


Monetary losses due to legal proceedings associated with bribery or corruption


of port calls in countries with the 20 lowest rankings in CPI*

*Transparency International's Corruption Perception Index

During 2020, we are not aware of any confirmed incident of corruption, bribery, or fraud.

During 2020, we are not aware of any confirmed incident of corruption, bribery, or fraud.

A Robust Risk Management and Control Framework

There are several risks associated with the shipping industry. We prepare an enterprise-wide risk assessment to identify and prioritize the key risks confronting the Company and to determine how these risks can be managed. Risk assessment involves a dynamic and iterative process for identifying and assessing risks to the achievement of our business objectives. The business objectives allow our strategy to be put into practice and shape our day-to-day operations and priorities. We have developed three main business objectives: 1. Operations, 2. Reporting, and 3. Compliance – that are measurable, observable, attainable, and relevant.

Fulfill charterer requirements and profit-making opportunities
Control cost in operations while maintain the profit margin on services rendered
Grow the business and manage our expansions successfully
Maintain Financing
Maintain our ability to finance operations
Innovation & Technology
Ensure reliability and timeliness of reports and reflect adequately areas of responsibility and reporting lines
Quality & Performance Level
Ensure management structure is adequate and efficient
Evaluate competence and address shortcomings in outsourced service providers
Maintain and operate a modern fleet of high quality and high fleet utilization rates
Ethics & Organizational Culture
Consider fraudulent actions regarding assets misappropriation
Maintain a culture of honesty and opposition to fraud and corruption through adherence to our policies and procedures
Conduct the company’s business affairs in an ethical manner
Human Resources
Attract and retain qualified and competent personnel
Create secure employment and career development opportunities for our employees
Society & Environment
Manage vessels that are built with optimum safety, efficiency and environmental performance
Internal Financial / Non-Financial Reporting
Maintain and monitor a well-established internal controls system
Monitor the business performance adequately
External Financial Reporting
Prepare complete and accurate financial reports on time
External Non-Financial Reporting
Present transactions and events with precision and accuracy
Internal Control
Establish effective internal controls that limit the opportunity to commit fraud
Regulations & Governments
Comply with all applicable laws and regulations

Risk assessment also requires that the Management considers the impact of possible changes in the external environment and within our own business model that may render internal controls ineffective. We provide Danaos Corporation with a detailed analysis of all the risks which affect our performance in various levels.

Our internal controls ensure robust risk management. For a strong internal control environment, we maintain two separate assurance functions.

Firstly, we have an independent Internal Audit Department, which reviews the Company’s processes and internal controls, providing appropriate recommendations and action plans. The Internal Audit department reports directly to the Audit Committee of DAC, provides recommendations, and monitors their implementation. Our Internal Audit department also assists the Management in achieving compliance with various laws and regulations, including the Sarbanes – Oxley requirements (SOX) regarding the internal control environment over financial reporting. During 2020, our Internal Audit team conducted several internal audits to assess and monitor the performance of the respective activities.

More specifically the number of internal audits (including SOX related audits) performed by our Internal Audit team in 2020 were 47, while they performed 1 ad-hoc audit and 4 follow-up reviews. Moreover, no material weaknesses or significant deficiencies were identified during our audits.


Internal Assurance audits


ICFR Controls tested


Material weaknesses or significant deficiencies identified in 2020 internal audits or external financial audits

Secondly, we have the Safety Quality and Environmental Department which reports directly to the Management, and its main focus is to maintain compliance with the relevant environmental and safety regulations, as well as the Danaos Safety Management System.

Additionally, we have established standards and procedures to make sure that all vessels under our management comply with the maritime environmental requirements set up under applicable international, flag state and port state laws. Among others, this includes:

Our good records in PSC (port state control) examinations are an indication of a sound safety management system. Apart from the regulatory PSC inspections, our fleet is also subject to the annual safety inspections performed by our Flag States. All recorded deficiencies are immediately rectified, and preventive actions are taken to the satisfaction of the local Port State Control. The deficiencies are collectively analyzed and evaluated to avoid recurrence of similar deficiencies and the necessary corrective events are circulated for training purposes to the rest of our fleet.

Timely corrective action is undertaken for both shore and shipboard deficiencies, not exceeding the three months. Third-party audits are performed by a Recognized Organizations member of IACS annually at our Piraeus office and twice within a 5-year cycle on board. The main purpose of these third-party audits is to maintain the validity of the Company’s Documents of Compliance and to issue Vessels’ Safety Management Certificate after having verified the effectiveness of our Safety Management System.

Paris MOU

Medium Performance Company

US Coast Guard

Excellent inspection record

Company’s Documents of Compliance
Vessels’ Safety Management Certificate

PSCI - FSI Deficiencies


Inspection / Vessel


Deficiency / Inspection


Inspections without Deficiency


ISM related